Comerica Announces Full Redemption of its Series A Preferred Stock and Related Depositary Shares

Rhea-AI Summary

Comerica (NYSE: CMA) announced the full redemption of its 5.625% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, and corresponding depositary shares. The redemption will occur on July 1, 2025, at $1,000 per Depositary Share (equivalent to $100,000 per share of Preferred Stock). The redemption affects 4,000 outstanding preferred shares, with regular quarterly dividends to be paid separately to holders of record as of June 13, 2025. Comerica has satisfied all regulatory requirements for the redemption, which will be processed through The Depository Trust Company (DTC). The bank, with $77.6 billion in total assets as of March 31, 2025, operates across 15 states through its Commercial Bank, Retail Bank, and Wealth Management segments.

Positive

• Demonstrates financial strength and flexibility to manage capital structure
• All regulatory requirements for redemption have been satisfied
• Regular quarterly dividends will still be paid to holders of record

Negative

• Preferred stockholders will lose their fixed-rate dividend income stream
• Reduction in the company's capital diversity

Insights

Banking & Financial Services Analyst

Comerica's redemption of preferred stock signals capital structure optimization and financial strength, potentially enhancing shareholder value through reduced dividend costs.

Comerica's decision to redeem its Series A Preferred Stock represents a strategic capital management move that warrants attention. The bank is redeeming 4,000 outstanding shares of its 5.625% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, along with the corresponding depositary shares, at $1,000 per depositary share.

This redemption signals confidence in Comerica's capital position. Preferred stock typically serves as a capital buffer for banks, and the ability to redeem it indicates the institution likely has sufficient capital strength to meet regulatory requirements without this layer. With $77.6 billion in total assets as of March 31, this redemption represents a relatively small portion of their balance sheet but demonstrates prudent capital management.

The timing is noteworthy as it comes on a dividend payment date (July 1, 2025), with the company executing a clean separation between the redemption and the final dividend payment. The 5.625% dividend rate on these shares represents a significant cost - eliminating this perpetual preferred stock will reduce Comerica's ongoing dividend obligations by approximately $22.5 million annually.

This move likely reflects the bank's assessment that maintaining this relatively expensive tier of capital is no longer necessary or optimal for its capital structure. By retiring these securities, Comerica potentially creates more flexibility in its capital allocation strategy, which could benefit common shareholders through increased financial efficiency and potentially improved returns on equity.

DALLAS, June 10, 2025 /PRNewswire/ -- Comerica Incorporated (NYSE: CMA) announced today that it will redeem all 4,000 outstanding shares of its 5.625% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A (the "Preferred Stock"), and the corresponding depositary shares, each representing a 1/100^th ownership interest in a share of Preferred Stock (the "Depositary Shares").

The Depositary Shares will be redeemed simultaneously with the Preferred Stock on the upcoming dividend payment date on July 1, 2025 (the "Redemption Date"), at a redemption price of $1,000 per Depositary Share (equivalent to $100,000 per share of Preferred Stock) (the "Redemption Price"). Accordingly, the Redemption Price does not include declared and unpaid dividends. Regular quarterly dividends will be paid separately in the customary manner on July 1, 2025, to holders of record at the close of business on June 13, 2025, prior to the consummation of the redemption.

All regulatory requirements relating to the redemption of the Preferred Stock and corresponding Depositary Shares have been satisfied by Comerica. The Depositary Shares are held through The Depository Trust Company ("DTC") and will be redeemed in accordance with the applicable procedures of DTC. Payment of the Redemption Price for the Depositary Shares will be made to DTC by Computershare Inc. and Computershare Trust Company, N.A., jointly, as redemption agent, on the Redemption Date. The address for the redemption agent is:

Computershare Trust Company, N.A.
Attn: Corporate Actions, COY: CMA
150 Royall Street, Suite 101
Canton, MA 02021.

Investors in the Depositary Shares should contact the bank or broker through which they hold a beneficial interest in the Depositary Shares for information about obtaining the redemption payment for the Depositary Shares in which they have a beneficial interest.

This press release does not constitute a notice of redemption under the certificate of designations governing the Preferred Stock or the deposit agreement governing the Depositary Shares.

Comerica Incorporated (NYSE: CMA) is a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank and Wealth Management. Comerica, one of the 25 largest commercial U.S. financial holding companies, focuses on building relationships and helping people and businesses be successful. Comerica provides banking centers across the country with locations in Arizona, California, Florida, Michigan and Texas. Founded on Aug. 17, 1849, in Detroit, Michigan, Comerica continues to expand into new regions, including its Southeast Market, based in North Carolina, and Mountain West Market in Colorado. Comerica has offices in 15 states and services 13 of the 15 largest U.S. metropolitan areas, as well as Canada and Mexico. Comerica reported total assets of $77.6 billion at March 31, 2025. Learn more about how Comerica is raising expectations of what a bank can be by visiting www.comerica.com, and follow us on Facebook, X, Instagram and LinkedIn.

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SOURCE Comerica Incorporated

FAQ

When will Comerica (CMA) redeem its Series A Preferred Stock?

Comerica will redeem the Series A Preferred Stock on July 1, 2025 (the Redemption Date).

What is the redemption price for Comerica's Series A Preferred Stock depositary shares?

The redemption price is $1,000 per Depositary Share, equivalent to $100,000 per share of Preferred Stock.

Will Comerica (CMA) still pay dividends before the preferred stock redemption?

Yes, regular quarterly dividends will be paid separately on July 1, 2025, to holders of record as of June 13, 2025.

How many shares of Comerica Series A Preferred Stock are being redeemed?

Comerica is redeeming all 4,000 outstanding shares of its 5.625% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A.

What are Comerica's total assets as of March 2025?

Comerica reported total assets of $77.6 billion as of March 31, 2025.